Vista - Can't connect to microsoft web sites from my virtual network!!

Hi there not sure if this is the right place but here goes.

I have set up a virtual server with windows server 2003 on a virtual network
based on a loop back adapter.

the loop back adapter is picking up the default gateway on the host
machine(win xp pro) via the shared network connection on the phisical network
adapter.

In windows server 2003 I can connect to the internet and browse any page
untill I came to connect to windows update at which point I get Page can not
be displayed.

It felt like the update server was down or soemthing, however after checking
that I could connect to it on the host machine this is obviously not the
problem.

Tryed connecting through help and support and through various urls that i
found on google.

Please anyone got any idea why it will not connect I have been googling this
for an hour or so with no joy


Many thanks